Durbin Ruling Could Delay EMV at ATMs, Group Says

The ATM International Association said last week’s ruling against the Federal Reserve's debit interchange regulations could delay converting ATM networks to handle debit cards embedded with chips.

U.S. District Court Judge Richard Leon’s decision said David Tente, executive director, USA for ATMIA, “could completely stall progress toward development of the debit solutions necessary for the vast US EMV migration. With one liability shift passed and others looming in the near future, we’re already seeing that the court’s action has created a heightened level of confusion in the industry.”

The ATMIA said it now represents ATM deployers, manufacturers and networks in 60 countries.

The Leon decision is an ATM issue, the ATMIA said, primarily because so many ATM cards are also debit cards.

Most financial institutions, therefore, are holding back on chip-enabled debit card issuance until a solution is agreed upon that not only meets regulatory requirements and the EMV specifications, but also provides network-to-network portability, without the need for mass reissuing of cards at a later stage, the association explained.

“The simple reality of that interrelationship means that a solution for ATM owners, operators and users will not be possible until all associated debit card issues are first resolved for retail merchants,” the ATMIA said, and that has largely frustrated ATM industry executives.

“Our industry today finds itself dealing with a court decision that has just thrown away the rules upon which we have based all of our work for the past year,” observed Tente. “Work that was necessary because the EMV spec being dictated by the global networks does not fit well with the U.S. payment system as a whole. And meanwhile, the industry still faces the same unrealistic liability shifts.

“The need to rewrite rules, which has now arisen as a result of this latest court decision, will almost certainly delay deployment of EMV debit solutions, pushing operators even further past the deadlines and simultaneously increasing implementation costs and potential fraud losses,“ the association complained.

“ATMIA is hopeful that global networks will finally come to realize that the current EMV migration roadmaps need some serious readjustment to fit broader industry needs,” Tente concluded.